Borrowers in Scotland fare better than rest of UK

Research by the Council of Mortgage Lenders shows that the credit crunch is having less of an impact on the housing market in Scotland than the rest of the UK.

In the first quarter of 2008 there were 16,000 mortgage loans in Scotland. While this is down 20% on the same period in 2007, the UK as a whole experienced a 40% drop in the same period.

Around 11% of all mortgage loans in the UK are now paid out in Scotland, compared with an 8% share a year ago. Remortgaging activity in Scotland is also relatively strong.

The data from the Council of Mortgage Lenders suggests that the housing slowdown has been less dramatic in Scotland because house prices did not reach the same peak as the rest of the UK.

Kennedy Foster, the Council of Mortgage Lenders Scotland policy consultant, said: “The shortage of mortgage loan funding has had a dramatic impact across the UK and we expect the slowdown to get worse before it gets better. However, there has been less impact in Scotland as affordability is better here, meaning borrowers have been less affected by the tightening in borrowing criteria.

“The Scottish government could help to underpin confidence at this uncertain time by increasing their investment in both the new-build and Open Market HomeStake schemes.”

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